On all the sub sites, and sub-sub sites I have "Display the same navigation items as the parent site" selected as well as "Show subsites" and "Show pages" checked.

I was expecting that all sites would render the first two levels of navigation (as limited by StaticDisplayLevels), however when on the sub 1 page for example, it renders as if it is the root, not displaying it's sibling sub 2, nor the site collection root.

This has worked fine in other scenarios, so my only guess is that since sub 1 has a sub site (sub sub 2), that it 'resets' itself as a new root. Baffling.